Ohio’s rural and safety-net hospitals will lose big under new Medicaid rules, analysis says
One of the main ways President Donald Trump’s signature law will save billions in the Medicaid program is through new work requirements. An analysis released Thursday said they will put a big dent in Ohio hospital revenues while increasing the cost of caring for newly uninsured patients.
The analysis, by the Commonwealth Fund, said that across the country, rural hospitals and those that care for a large share of the poor will be hardest hit.
Trump’s One Big Beautiful Bill Act cuts nearly $1 trillion in Medicaid spending — including about $33 billion in Ohio — over the next 10 years. It also cuts $230 billion in federal food assistance over the same period.
At the same time, the law gives $1 trillion in tax cuts to the richest 1%. It also balloons the deficit by $3.4 trillion, according to the nonpartisan Congressional Budget Office.
One of the biggest ways the Trump law will cut Medicaid spending is through work mandates, which will take effect just after next year’s midterm elections.
The work requirements are being imposed even though 92% of non-disabled Medicaid recipients under 65 are either working, or couldn’t work due to caregiving responsibilities, or were ill, or were in school.
When work requirements were tried in Arkansas, they didn’t achieve their goal — if it truly was to get able-bodied recipients off of Medicaid and into jobs.
A quarter of the population subject to the requirement lost coverage, as the state saw “an increase in the percentage of adults who were uninsured, and no significant change in employment—as nearly everyone targeted by the policy met the requirements already or qualified for an exemption,” KFF reported.
That might have happened because Medicaid recipients say they’re already subject to lots of confusing rules, and the Arkansas experiment simply hassled many eligible residents off of the system.
Hardest hit by the work requirement will be the 40 states — including Ohio — that expanded Medicaid as part of the Affordable Care Act to cover low-income adults, the Commonwealth Fund report said.
“Hospitals in Medicaid expansion states could see operating margins reduced by an average of 11.7 percent to 13.3 percent,” the report said.
Rural hospitals and those with a big share of poor patients are already struggling due to insufficient Medicaid reimbursements, having to care for a high mix of uninsured patients and increasing costs.
The Commonwealth Fund report said they’ll be particularly hard hit by the new work requirements.
“Between 5.1 million and 5.8 million people could lose their Medicaid coverage and become uninsured as a result of the federal work requirements,” the report said.
“The 2027 implementation date means that states may not have sufficient time to modify their systems to automatically verify whether people are employed or exempt at the same rates seen previously in Arkansas and New Hampshire. Without this infrastructure, many Medicaid expansion enrollees will be forced to manually verify their community engagement activity or exemption status, increasing the likelihood that eligible people will lose coverage because of the reporting process.”
Ohio’s rural hospitals seem particularly vulnerable.
The Ohio Hospital Association in May told the legislature that half of Ohio hospitals and 72% of rural hospitals have reported operating losses since 2022.
The Commonwealth Fund report said that under the new Medicaid work requirements, rural hospitals’ operating margins will decline by 28.8% to 32.8%.
In addition, the state’s safety-net hospitals will lose between 7.4% and 8.4% in Medicaid revenue under the law, the report said.
The Ohio Hospital Association has declined to say whether the state’s hospitals will gain or lose money under the provisions of the One Big Beautiful Bill Act. It didn’t immediately respond to questions for this story.
The Commonwealth Fund report estimates that the great majority of those who lose Medicaid coverage will become uninsured.
Emergency rooms are required by law to treat people, regardless of their ability to pay. So as the number of uninsured patients goes up, so does the cost of uncompensated care hospitals have to provide.
Rural hospitals in Ohio will see uncompensated-care costs increase between 19.2% and 21.7%, the report said.
Safety-net hospitals in the state will see a corresponding increase of 16% to 18.1%, it said.
The organization representing Ohio emergency doctors has warned that the losses in revenue and increased costs will affect all patients.
Hospitals will have to make cuts elsewhere, resulting in longer wait times, increased prices and decreased services, it said.
The Commonwealth Fund said the effects will radiate into the broader community.
“Alongside impacting hospital and Medicaid enrollees, the work requirement policy also will affect each hospital’s surrounding community, particularly hospitals in poor or rural areas,” it said.
“The combined effects of Medicaid work requirements on safety net hospitals and community health centers could leave communities with little to no access to primary, specialty, or emergency care, significantly increasing travel times for routine and emergency health needs.”
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